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Quick HitMatthew BlakeFriday April 27th, 2012, 3:28pm

Obama, Quinn Taken To Task By Economists

Progressive economists slammed President Barack Obama and Gov. Pat
Quinn today for not doing enough about a prolonged recession and
unemployment crisis. Also, Quinn came under attack for not doing enough
to increase the state tax base before issuing landmark proposed cuts to Medicaid and public employee pensions.

“It’s
kind of hard for a voter to know what the difference is between a
Democratic and Republican plan for lowering employment,” contended Josh
Bivens, acting director of research and policy at the Washington, D.C.
Economic Policy Institute.

Bivens spoke at a symposium organized
by the Center for Tax and Budget Accountability, or CTBA, a Chicago
group maybe best associated with its tax increase advocacy.

Ralph
Martire, executive director for CTBA, acknowledged that Quinn and the
General Assembly increased the personal and corporate income tax rate in
January 2011, which is set to expire in 2014. But Martire says that
Illinois is still 40th among states in its overall tax burden.

Martire wants Illinois to have a graduated, instead of a flat, income tax and also to impose a sales tax on a much broader range of services – from parking garages to massages.

Martire
contends that Illinois residents mistakenly think they pay too much in
taxes, because they do, indeed, pay high property taxes imposed by local
governments. “Because the state does not pay for what it should, it
kicks down to local government,” Martire argued.

The CTBA point of
view contrasts to that of another Chicago policy group – the Chicago
Civic Federation – which asserts that state government must first address
spiraling pension and Medicaid costs, instead of broadening the tax
base.

This is not an armchair debate.

The Civic Federation's January report
on state government finances has carried the day in Springfield. Quinn
held up the Civic Federation report in his February budget talk, and the
governor is going by that group’s playbook on pensions and Medicaid.

It
bears watching if the General Assembly takes up any CTBA ideas in the
budget they draft this spring from Quinn’s budget proposal.

State
lawmakers at the fiscal symposium like Rep. John Bradley (D-Marion),
chairman of the House Finance and Revenue Committee, said they
were open to a graduated income tax, but noted that it would require a
constitutional amendment.

Bradley pointed out that the state
implemented something of a variation of the graduated tax, when the
General Assembly passed and the governor signed an expansion of the
state earned income tax credit for working class families in January.

The
symposium also included a downbeat assessment of the national economy.
Bivens noted the unemployment rate dropped to 8.2 percent in March, but
that “unemployment is still the highest its been in a quarter of a
century.”

More important, the rate has dropped artificially:
Bivens said that two-thirds of the drop this year is caused by people
giving up their job search – people that the unemployment rate does not
account for.

Bivens notes that the country is “ten million jobs
short just to get back to where we were in December 2007,” prior to the
housing bubble-induced recession.

“And December 2007 really wasn’t
economic nirvana for lots of American families,” Bivens said. American
family income stagnated between 1999 and 2007, Bivens noted.